The result can be very messy. How and what you eat and drink with your family and friends may be different from what is acceptable while eating and drinking as a business person. According to Richard Bell in his Understanding African Philosophy (2002), the African regional cultures were broken up and destroyed (or at least radically altered) primarily by the European and Islamic incursions going back some 500 years. Canadians will also feel more comfortable talking when they can look you in the eyes. They often touch, usually an arm, and even kiss womens cheeks on a first meeting. Also it is important that you try to learn something about the persons culture, country, and business. WebThe cost of doing business in a given company is influenced in various ways by a country's culture. Your understanding of culture will affect your ability to enter a local market, develop and maintain business relationships, negotiate successful deals, conduct sales, conduct marketing and advertising campaigns, and engage in manufacturing and distribution. What are the most important factors to consider in evaluating and selecting a country for international business? They dont appreciate that in the culture they are working with punctuality is a much more nuanced concept. Culture determines all of these key issues. Most employees arent interested in finding a job that can just pay the billsthey have too many options to settle for that. As a business owner, company culture is too important to ignore. Companies routinely overestimate the attractiveness of foreign markets. How Do Cultural Differences Affect International Business? More often than not, situations take precedence over schedules. For example, youll need to understand the following: (AACSB: Reflective Thinking, Analytical Skills). Costs are the expenses that must be made in order for a business to function. Lets look at some significant areas: When you work in an environment that involves others from various cultures, you need to be aware of your own culture in terms of each of these areas. Culture is learned behaviour that is transmitted among people within a country to another. Five Ways Company Culture Affects Business Performance. He who wants the rose must respect the thorn.. There are three levels of eye care Usually, those cultures that are time conscious are less relationship orientated. When in the presence of the chief, remove your hat, keep your hands out of your pockets and do not cross your legs. This includes such topics as religion, politics, or sexual matters. Again, the best advice is to observe others. But there are cultural differences regarding eye contact. High employee turnover is costly, time-consuming and a sign Bringing different expectations, understandings, motivations, etc. They may be the leader and everyone else may need to follow their command or wishes. If you come from a culture in which time is money and you find yourself working with a culture in which it isnt, your cultural norms can result in you making bad decisions. Their negotiating style reflects these characteristics. In conclusion, the CAGE framework provides an important learning to identify the potential of Africa from an outsiders perspective. And in our role as a stakeholder in the organisation, its important to raise the awareness of cultural issues within our organization beyond the factual cultural information obtained. It is important to remember that each person considers his or her sphere or world the most important and that this attitude forms the basis of his or her individual perspective. llP$syxyx(,~OoQ,b+b1K;+WW[aq9I3t As the effects of the recession are felt around the world, the reactions of consumers in different countries to rising food prices is far from uniform, although This kind of alignment is especially important as your business grows. Its more useful to see the unhurried approach as an opportunity to develop good relations. Many people unfamiliar with Latin American customs, especially those from highly time-conscious countries like the United States, Canada, and those in Northern Europe, can find the lack of punctuality and more fluid view of time frustrating. They are more likely to be flexible and creative in their approach and have less rigid constraints than their counterparts from more established companies. Often the greatest challenge is learning not to apply your own value system when judging people from other cultures. Culture also impacts you if youre sourcing from different countries, because culture impacts communications. 9 Mistakes I Made as an English Language Learner, Attention All English Language Learners - Avoiding The 200 Most Common English Mistakes, 96 More Slang Expressions from Pix to Zs to Become ESL Savvy, 2 Ways To Talk (Casual and Formal) in the English Language, How to Rock a Conversation with Strangers and Boost Your ESL Skills, New Years Resolutions Taking Flight to English Fluency, Get Your Mojo On - Sequel to 100 Everyday Slang Words from Inhale to Pinky, Why READ? Business protocolhow to physically and verbally meet and interact; How culture impacts how people view time and deadlines; How they are likely to ask questions or highlight problems; How people respond to management and authority; How people perceive verbal and physical communications; and, business protocolhow to physically and verbally meet and interact, how culture impacts how people view time and deadlines, how people are likely to ask questions or highlight problems, how people respond to management and authority, how people perceive verbal and physical communications. ICTSD (International Centre for Trade and Sustainable Development) was established in 1996 as a non-profit organization based in Geneva, Switzerland. Eating and drinking traditions/etiquette. However, if you are going to sample the food and you think it just might not appeal to your taste buds, then you might consider cutting it up into a small piece and at least tasting it. What are three steps to keep in mind if you are evaluating a business opportunity in a culture or country that is new to you? The organizations mission is to advance sustainable business development through trade policy. Culture has a significant impact on how people think, communicate, and act, as well as the types of transactions they engage in and how they negotiate them. In Iraq a few years ago a foreign expat manager actually managed to cause a riot and get himself beaten up due to not understanding local ways. Look at their faces and see how expressive they are when they speak. Working with people from different cultures can present considerable cognitive challenges. Its important to note that these elements are adaptive, changing as outside forces influences the country. A toxic work culture can impact a company in many ways which may affect the business directly or indirectly. Somehow, you need to allow differences to exist in the working relationship so you validate everyone. from a broader perspective and not just from your viewpoint. Lets look at five ways company culture affects business performance. It is important to know how to address them. We must note that values, norms and morals are universal assets in understanding and defining culture; which do not change easily. Professionals often err when they think that in todays shrinking world, cultural differences no longer pertain. 12 Tips to Improve Your English in 12 Days - Free Ebook! Each country has different constraints, including the terms of payment and regulations, and you will need to keep an open mind about how to achieve your objectives. Various cultural influences can affect how much it costs a company to do business in a given country. The way consumers think and behave is influenced by culture. Examples of Cultural Differences in International Business. The CAGE framework of distance presented here considers four attributes: cultural distance (religious beliefs, race, social norms, and language that are different for the target country and the country of the company considering expansion); administrative or political distance (colony-colonizer links, common currency, and trade arrangements); geographic distance (the physical distance between the two countries, the size of the target country, access to waterways and the ocean, internal topography, and transportation and communications infrastructures); and economic distance (disparities in the two countries wealth or consumer income and variations in the cost and quality of financial and other resources). Which country do you think is the most complex? <> A lot has to do with the size of the country, the extent to which it has developed a modern industrial sector, and its openness to outside influences and the global economy. Even though people are focused on the bottom line, people do business with people they like, trust, and understand. Culture determines all of these key issues. The opening case shows how a simple issue, such as local flavor preferences, can impact a billion-dollar company. The influence of cultural factors on business is extensive. It helps make us knowledgeable about the questions to ask, not the answers. What happens when you have a culture that sees eye contact as a sign of confidence and engagement interact with one that sees eye contact as rude? employ a distributive bargaining approach - one that emphasizes competition rather than cooperation. Not making eye-contact might make the other person think that you are shy, insecure, or even insincere! The result is a sort of cognitive dissonance both sides are looking at one another through their own Cultural Lens which means they are interpreting behaviours incorrectly and attributing erroneous meaning to them. A visual depiction of the site's image and its history Start using BusinessTown to stream your courses. Its critical to understand the history and politics of any country or region in which you work or with which you intend to deal. What is the effect of culture to global business? By way of exploring these differences, we are briefly going to look at 3 ways in which culture can cause challenges. In fact, there are numerous instances in which deals would have been successfully completed if finalizing them had been based on business issues alone, but cultural miscommunications interfered. Their negotiating style reflects these characteristics. Cultural assumptions/ethics/political correctness, Business organization/management style and leadership/business relationships, Entertaining and socializing/ gift giving. 1. Whereas, three piece suits and dresses with nylon hose was the norm for several decades in the American business society, corporate casual is gaining more acceptance. 1) Outline why the culture of a country might influence the costs of doing business in that country. For example, English manners in Kenya and Nigeria and Dutch manners in various parts of South Africa. These meetings will give them a chance to ask questions and share their concerns/ideas with you. When employees are more enthusiastic about their work, they tend to go above and beyond whats expected of them, which translates to better service for your customers. Taking account of these factors affects a person's perception of a problem and their behavior in relation to that problem. Anglophone countries (English speaking), Francophone countries (French speaking), and Lusophone countries (Portuguese speaking), excluding the Arab-influenced North Africa. How cultures can impact the cost of doing business? Conversely, entrepreneurs are often well equipped to negotiate global contracts or ventures. Cultural diversity is a central part of the African collective identity. WebTwo cultures are to be faced by a business organization when doing business in another country organizational culture and the culture of the country to which the organization You should not write on the card, bend it, or leave it behind. Distance, however, does not refer only to geography; its other dimensions can make foreign markets considerably more or less attractive. Today, more than ever, it is difficult to distinguish between formal and leisure clothes. It affects our relationships. In reverse, those cultures that are a lot more flexible with their approach to time can see the time-conscious professionals as rigid and materialistic, which ties in with the value given to relationships. Understand the aspects of business most impacted by culture. There are laws/regulations, intellectual property laws, and treaties/agreements. Some mannerisms dont really matter to foreigners and it is the effort that counts. The cultural nuances that affect organisations obviously go beyond the ability to greet or choose the correct gift. As a result, brands build strong brand value. And in England, you would eat your scone after your sandwich but before your cake. 1 0 obj Do kindly note that the African approach to decision-making does not mean that local business people are unable to make quick decisions. Marriage and religious customs, as well as other social customs. The more marked the differences, the greater the distance between the countries (in terms of being attractive). It refers to the possibility that a company's operations may be affected by cultural differences such as language, customs, norms, or customer preferences in a certain country. 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how culture affects cost of doing business